Thursday, July 06, 2006

Summer Days

Its pretty quiet now as summer finally kicks off. The market is pretty rangebound and I am hoping the NASDAQ (2155) can get a little pop so that I can peel off some of my tech holdings. Also being pretty into the energy space I find natural gas pretty fascinating. Almost all tech tools indicate that it is a major sell - but at 5-6 bucks how much lower can we go? On top of that we have $75 oil and hurricane season rapidly approaching. I am long some SJT at 37.50 and it yields about 11% so I feel fairly comfortable with that position.

I am going to wait a few weeks to start to leg into my SP short position as well I continue to expect a little market bounce. But in the long run when you consider the current condition things are in I dont see how you can be in long this market long term. North Korea, Iran, Nigera are all major hot spots right now which could have major economical impact in the US (at least the latter) and North korea could very well tip off a war with Japan and Taiwan looking to test some missiles too.

Finally a long term chart on the 10 yr bond was pointed out to me today...this snapshot doesnt do it justice but i think the point is served. Its a secular bear market in bonds which - Im told is not typically good for equities. This brings me to a final point for the night. I think what we are about to face is a bear market across all asset classes. I think we are going to enter a period where money flows out of everything Bonds, stocks, commmodities. As I try and build out this thesis I keep thinking about deflation and where to try and hide out. I guess some say buy physical gold - Im not sure if thats that way to go or not. I certainly think some type of currency diversification going to enter the equation Im just not quite sure what.